Net Protections Holdings told investors on a first-quarter earnings call that its core consumer buy-now-pay-later service is growing volume by getting cheaper, not just bigger. Large merchants keep signing on, lifting gross merchandise volume, but "the competitive environment is tough," and prices have come down to match it. The company still expects full-year gross profit to land "slightly above" last year's level, but its finance chief said that once a prior-year one-off is stripped out, underlying gross profit growth is close to flat.
| Topic | Management's disclosed comment |
|---|---|
| Consumer BNPL gross margin | GMV is rising on new large merchants, but price cuts to compete are trimming gross margin; full-year gross profit expected only slightly above last year. |
| Adjusted gross profit growth | After stripping out a prior-year one-off, underlying gross profit growth is roughly flat, per the CFO. |
| atone margin outlook | Management sees room to cut the unpaid-bill rate, collection costs, and operating costs, and expects atone's margin to keep improving. |
| B2B GMV growth | Growth has slowed as last year's new large-merchant boost fades, but the current sales pipeline is described as very strong. |
| Credit-card alliance | Referrals have started; meaningful GMV contribution is expected at the earliest in the second half of this fiscal year, mainly next fiscal year. |
The margin story is different at atone, the company's other payment brand. Management said there is still room to cut the unpaid-bill rate and reduce debt-collection and operating costs, and expects atone's gross margin to keep improving as those levers get pulled. Its take rate has ticked down slightly, but management attributed that to growth in e-commerce digital merchants who pay fees the company does not consider too thin, and said it does not expect the take rate to fall much further.
On the B2B side, growth has cooled as the effect of large merchants added a year earlier fades and sales resources shifted toward partnerships. Management called the current sales pipeline "very strong" and expects growth to return to the pace laid out in its medium-term plan.
Investors also pressed on the company's alliance with a major credit-card issuer. Referrals have started, but the CEO said any meaningful contribution to gross merchandise volume will begin "at the earliest" in the second half of the current fiscal year, with the bulk of the effect landing in the following fiscal year. Asked how large that contribution might eventually be, he said it was too early to say, adding only that he hoped it would reach "a certain proportion" of volume.